Nippon Ski Resort Development Co.,Ltd. FY2026 Q1 Earnings Report

Financial Highlights

• Net Sales: ¥1.36B
• Operating Income: ¥-317M
• Net Income: ¥-53M
• EPS: ¥-6.30

Income Statement

Balance Sheet

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend Information

Full Year Forecast

Disclaimer

This data was automatically extracted from XBRL files. Please refer to the original disclosure documents for accuracy.

AI Financial Analysis

Executive Summary

Japan Ski Resort Development Co., Ltd. (6040) reported FY2026 Q1 consolidated results under JGAAP that reflect pronounced seasonality: revenue was ¥1.36bn, down 6.4% YoY, and the company posted an operating loss of ¥317m (loss widened 12.3% YoY) and a net loss of ¥289m (loss widened 18.6% YoY). For a ski-focused operator, Q1 (off-season ahead of peak winter) typically carries negative operating leverage, so losses are not unusual; however, the YoY revenue decline and larger loss indicate softer preseason demand and/or higher fixed-cost burden. Gross margin was 29.2%, suggesting decent pricing and mix on limited off-season activities, but this was insufficient to cover fixed operating costs, resulting in negative operating income. Ordinary loss of ¥308m tracks operating loss closely, implying limited non-operating offsets and modest interest burden (interest expense ¥6.5m; interest coverage -48.6x on EBIT). Net margin stood at -21.25%, and DuPont shows ROE at -3.51% driven by low asset turnover (0.099) and moderate leverage (assets/equity 1.67x). Balance sheet strength appears solid: current ratio 260.3%, quick ratio 211.3%, and working capital ¥3.23bn provide ample seasonal liquidity. We calculate an equity ratio of roughly 59.8% (¥8.226bn equity / ¥13.758bn assets), notwithstanding the reported 0.0% figure, which likely reflects an undisclosed item rather than true zero. Inventories of ¥988m (about 18.9% of current assets) look consistent with the pre-winter build. Debt-to-equity is a manageable 0.57x, and ordinary loss is not being exacerbated by financing costs at present. Cash flow data (OCF, capex, FCF) and D&A were not disclosed in XBRL (reported as 0), which limits earnings quality and FCF assessment; for an asset-heavy ski operation, true D&A is likely material, meaning EBITDA is understated by the data set. Dividend per share is shown as zero with a 0% payout; against a quarterly loss and absent FCF data, a cautious stance on distributions is reasonable until winter season cash inflows are visible. The key to the FY2026 trajectory will be winter visitation, snowfall and ski-days, pricing for lift tickets/season passes, and inbound tourism trends; a rebound here can quickly reverse off-season losses. Overall, fundamentals show a conservatively financed balance sheet and adequate liquidity but weaker preseason demand and higher losses YoY. The next two quarters will be determinative for full-year profitability and cash generation. Data limitations (notably cash flow, D&A, share counts) require careful interpretation of profitability metrics and capital efficiency. We focus on operational metrics into peak season and watch for early indicators such as advance ticket sales and occupancy in resort accommodations. Absent cash flow disclosure, we triangulate from balance sheet strength and modest interest costs that solvency risk remains low near-term.

Profitability Analysis

roe_decomposition: ROE -3.51% = Net margin (-21.25%) x Asset turnover (0.099x) x Financial leverage (1.67x). The negative margin is the primary driver, with low turnover typical for a seasonal Q1. Leverage is moderate and not the key determinant. margin_quality: Gross margin at 29.2% on ¥1.36bn revenue suggests reasonable pricing/mix on limited off-season operations, but fixed SG&A and maintenance costs led to an operating margin of -23.3%. Net margin of -21.25% is close to operating margin, indicating minimal non-operating drag aside from ¥6.5m interest. operating_leverage: Loss widened YoY despite a relatively stable gross margin base, implying fixed-cost absorption issues in the off-season. As volumes recover into winter, operating leverage can swing results positively; conversely, weak visitation would materially pressure profitability.

Growth Assessment

revenue_sustainability: Revenue declined 6.4% YoY to ¥1.36bn in an off-season quarter, pointing to softer preseason activity (e.g., summer attractions, lodging, ancillary). Sustainability hinges on winter season performance; preseason trends do not guarantee in-season outcomes. profit_quality: Operating loss of ¥317m worsened 12.3% YoY, indicating higher fixed cost burden or weaker mix. Interest expense remains modest, so deterioration is operational rather than financial. Lack of D&A disclosure obscures EBITDA and underlying cost trends for an asset-heavy model. outlook: Key swing factors for FY2026 are snowfall/ski-days, lift-ticket and season pass pricing, inbound tourism recovery, and cost inflation (energy, labor). A normal-to-strong winter could offset Q1 weakness; adverse weather would magnify negative operating leverage.

Financial Health

liquidity: Current assets ¥5.243bn vs current liabilities ¥2.014bn yields a current ratio of 260.3% and quick ratio of 211.3%, indicating strong near-term coverage. Working capital stands at ¥3.229bn; inventory at ¥988m (18.9% of current assets) aligns with seasonal build. solvency: Total liabilities ¥4.702bn vs equity ¥8.226bn; we estimate an equity ratio of ~59.8% despite the reported 0.0% placeholder. Debt-to-equity 0.57x and modest interest expense (¥6.5m) suggest manageable leverage and low near-term solvency risk. capital_structure: Assets ¥13.758bn funded with equity 59.8% and liabilities 40.2% by our calculation. Financial leverage 1.67x is moderate, providing resilience while allowing some capital efficiency in peak season.

Cash Flow Quality

earnings_quality: Cash flow statements were not disclosed (OCF/FCF reported as 0), limiting assessment of accruals and earnings-to-cash conversion. Given asset intensity, true D&A (reported as 0) is likely significant; EBIT likely understates EBITDA, and net income understates operating cash potential in peak season. fcf_analysis: Free cash flow cannot be computed due to missing OCF and capex data. Seasonal working capital unwind in winter typically supports OCF; capex cycles (lifts, snowmaking, maintenance) are pivotal but undisclosed here. working_capital: Inventories increased seasonally to ¥988m; current assets comfortably exceed current liabilities. Monitoring receivables turn (not disclosed) and inventory utilization through peak season is key to cash conversion.

Dividend Sustainability

payout_ratio_assessment: Annual DPS is shown as ¥0 with a payout ratio of 0%. With a quarterly net loss (EPS -¥6.30) and absent OCF/FCF data, distributions would prudently remain constrained until peak season cash generation is evidenced. fcf_coverage: FCF coverage is not assessable (reported 0 due to undisclosed OCF/capex). Historically for seasonal operators, dividends—if any—should be gauged against full-year FCF after maintenance capex. policy_outlook: Given seasonality and current losses, a conservative dividend stance is likely near-term. Visibility into winter performance and capex requirements will inform any future policy adjustments.

Risk Assessment

Business Risks:

• Adverse weather/snowfall variability reducing ski-days and visitation
• Climate change impacting long-term season length and snow quality
• Demand sensitivity to domestic consumption and inbound tourism trends
• High operating leverage from fixed costs (lifts, facilities, staffing)
• Energy and utilities cost inflation affecting snowmaking and operations
• Labor availability and wage inflation in resort regions
• Competition from alternative leisure activities and other resorts
• Operational disruptions (equipment downtime, safety incidents)

Financial Risks:

• Seasonal cash flow concentration with off-season losses
• Exposure to interest rate increases on floating-rate debt
• Potential capex requirements for lift upgrades and snowmaking
• Limited disclosure of cash flow and D&A complicating credit assessment

Key Concerns:

• YoY revenue decline of 6.4% and widened operating loss in Q1
• Missing cash flow and D&A data obscures earnings quality
• Execution dependence on the upcoming winter season to restore profitability

Investment Implications

Key Takeaways:

• Q1 reflects typical seasonal loss but with weaker YoY top line (-6.4%) and wider operating loss (-12.3% YoY).
• Balance sheet is sound: estimated equity ratio ~59.8%, current ratio 260%, D/E 0.57x.
• Modest interest burden (¥6.5m) limits financial drag; profitability hinges on operational recovery in winter.
• Data gaps (OCF, capex, D&A) limit clarity on EBITDA and FCF.
• Near-term results will be driven by snowfall, pricing, and visitation; operating leverage cuts both ways.

Metrics to Watch:

• Snowfall, ski-days, and lift utilization through Q2–Q3
• Advance sales/season passes and average ticket pricing (ARPU)
• Resort occupancy and ancillary spend per visitor
• Energy costs and labor expenses versus plan
• Capex commitments (lifts, snowmaking) and disclosed D&A
• Operating cash flow and working capital release during peak season
• Debt levels and interest expense trajectory

Relative Positioning: Within Japan’s leisure/resort operators, the company exhibits stronger-than-average liquidity and moderate leverage, but near-term operating performance trails due to weaker preseason demand; winter execution will determine whether it converges back toward peer profitability.

Disclaimer

This analysis was auto-generated by AI. Please note the following:

• No Guarantee of Accuracy: The accuracy and completeness of this analysis are not guaranteed. For accurate financial data, please refer to the original disclosure documents published on TDnet or other official sources
• Not Investment Advice: This analysis is for general informational purposes only and does not constitute investment advice under applicable securities laws. It is not a recommendation to buy or sell any specific securities
• At Your Own Risk: Investment decisions should be made at your own discretion and risk. We assume no liability for any losses incurred based on this analysis